Form 1099-S

[Kdm2024]

We received a 1099-S for 2024 for the sale of our land.   80% of the gross proceeds were used to pay off another property.  How do we report it and on what form?

[JamesG1]

IRS form 1099-S Proceeds from Real Estate Transactions may report:

• Your main home, 
• A second home, 
• A vacation home, 
• Land,
• Residential rental property, or
• Real property recorded as a business asset.

The tax treatment of each of these transactions differ. Sale of a second home, an inherited home or land are considered investment sales.

In TurboTax Online Premium, follow these steps to report the sale:

• Click on the Search magnifying glass and enter sale of second home.
• Click on the Jump to sale of second home link.
• Click on Add investments.
• At the screen Let's import your tax info, click on Enter a different way.
• At the screen OK, let's start with one investment type, select Other and click Continue.
• At the screen Tell us more about this sale, enter the name.  Click Continue.
• At the screen Now, enter one sale….., enter the information.  Click Continue.
• At the screen Let us know if any of these situations apply to this sale, answer as appropriate.  Click Continue.

The entry will be reported:

• on Schedule D of the Federal 1040 tax return, and 
• on line 7 of the Federal 1040 tax return.

The gross proceeds used to pay off a loan securing another property would likely not be a taxable event.  What was the nature of the other property?

[Hal_Al]

I assume this was not the sale of your primary home, which is treated differently.

In TurboTax (TT), enter at:
- Federal Taxes tab (Personal in  Home & Business)

 - Wages & Income

Scroll down to:

  -Investment Income

   -Stocks, cryptocurrency, mutual funds, Bonds, Other (Real estate is other)

Follow the interview. It will go on form 8949, then to Schedule D.

The fact that you used some of the proceeds to pay off another property is irrelevant.  The entire gain is taxable.